- 4 - As of April 15, 1997, the collateral had an aggregate market value of approximately $750,000, which represented 120 percent of the outstanding principal due on the promissory note.3 At the request of CareMatrix, petitioner delivered the loan documents to CareMatrix’s counsel. On or about May 29, 1997, CareMatrix took possession of the loan documents and the stock certificate for the collateral from its counsel. The promissory note became due and payable on April 15, 2000, at which time the outstanding principal and interest due was $746,376.52. CareMatrix subsequently demanded payment, but petitioner refused to pay, alleging that the promissory note was nonrecourse and that CareMatrix held the collateral. CareMatrix made no further collection efforts. 3The parties stipulated the following with respect to the value of the collateral as of Apr. 15, 1997: “Pursuant to the Note, the shares pledged had an aggregate market value of 120% of the principal borrowed - approximately $750,000.00.” As noted above, petitioner appears to have taken a basis in the CareMatrix and PhyMatrix stock equal to the value of the PhyMatrix and CareMatrix stock at the time the stock was received by petitioner during 1996. However, the record provides no evidence that the value of the PhyMatrix stock was the same on April 15, 1997 (the date of the loan transaction) as it was on the date that the stock was transferred to petitioner during 1996. Because the value of the collateral may have fluctuated from the date that petitioner received the PhyMatrix stock until the date that petitioner pledged the PhyMatrix stock as collateral, the aforementioned stipulation as to the value of collateral on Apr. 15, 1997, is insufficient to establish petitioner’s basis in the collateral on that date. Consequently, we are unable to determine from the record petitioner’s basis in the collateral.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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